Urban Outfitters Falls after Earnings Miss

By Avi Salzman

Urban Outfitters (URBN) fell about 5% after posting weaker than expected third quarter earnings. The stock had risen more than 5% during regular trading hours.

Urban posted 40 cents of EPS, a penny worse than the Street had expected, on in-line sales. Urban also said that its comparable store net sales fell 1% — including direct-to-consumer sales, Urban’s comps rose 8%.

“For the three months ended October 31, 2012, the gross profit rate improved by 222 basis points versus the prior year’s comparable period. The increase in gross profit rate was primarily due to a reduction in merchandise markdowns.”

The company said that it expects a strong holiday shopping season.

“Favorable customer response to our product offerings and better marketing resulted in record third quarter sales and significant margin improvement,” said Chief Executive Officer Richard A. Hayne. “We see this trend continuing into the fourth quarter which bodes well for our Holiday season.”

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There are 2 comments

NOVEMBER 19, 2012 4:33 P.M.

goodwill wrote:

Stock is rich on pretty much every valuation metric. This is priced for perfection. A miss no matter what the magnitude should drive the valuation closer to its peers. Also they have considerable footprint in the NE affected by Sandy. Look for the stock to get into the high 20's.

FEBRUARY 24, 2013 4:45 P.M.

Archie L. Cox wrote:

If there are falling values, it means something isn't working right. Knowing that Urban Outfitters fell about 5% after the post is definitely not a good thing to happen. It is said that it became weaker as compared to the result of the last quarter earnings so something might be wrong. If stocks rose to as high as 5% during the regular trading hours, I think it is a good idea to focus on dealing with transactions during these indicated hours. Let us hope that the Urban Outfitters will become stronger next quarter.

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